"related:" prefix in Google

Does anyone know how the “related:” prefix in Google works?

For example, if I type “related:mysite.com”, what is the criteria that Google uses to identify the related sites?

I don’t think anyone aside from select Google staff knows what the criteria is when we use related: in the query. However, Google has said this regarding similar results in the SERP:

When you enter a query that’s similar to a more common query, our algorithm will return the full results for your initial query as well as the top three results for the more common query. Results for the more common query appear in the middle of the page and are set off by the phrase “See results for.” To view all results for the more common query, just click on the query itself.

when you try related:yoursitename, you get display of sites similar to yoursite niche… http://www.google.co.in/search?hl=en&q=related%3Ayahoo.com&btnG=Search&meta=&aq=f&oq=
I tried related:yahoo.com

with related: u find your business related site like your competitor. Depend on which type keywords use on your page